Digital Exports Dwarf Other Industries, So Why Is The USTR Ignoring Them?

from the just-clueless dept

We've talked a few times about how the USTR seems to have an antiquated view of the American economy these days, which is driving it to make some really bad and dangerous assumptions about what sorts of things should be in the Trans Pacific Partnership (TPP) agreement -- things that benefit a few older legacy industries, which totally ignore the reality of where innovation is happening today. In fact, the current policies that the USTR is pushing in the TPP agreement seem designed to actually hold back the most innovative industries of today, pushing them to other countries instead, and massively harming the US economy. We've detailed, for example, how the main committee of industry folks who are the "advisers" on the "intellectual property" chapter come from legacy industries, rather than anything involving the internet. The "IP" Industry Trade Advisory Committee (ITAC 15) includes a bunch of lumbering giants, more focused on protecting their positions, than on innovating.

Senator Ron Wyden's office recently asked the Congressional Research Service (known for the high-quality, non-partisanship of their reports) to look at how much "digitally enabled services" were exported out of the US today, and to compare that with other "large" exporters, which the USTR generally thinks it's protecting. The results are somewhat astounding. Digital exports are massive compared to all of those other industries.

And yet, the USTR seems focused on helping out all those other guys at the expense of the digital services that make up such an important part of our economy. Why? At this point, it seems that there's just a massive level of ignorance within the USTR about which part of our economy is actually driving so much growth -- and their plans to protect old line industries create real problems for the internet, and they just don't seem to care.

At least some in Congress are finding this situation quite troubling. Reps. Jared Polis and Thomas Massie have teamed up to ask USTR Michael Froman to finally commit to actual transparency, and that includes both releasing the text of the IP chapter and finally letting people who are actually knowledgeable about the internet and its impact on the economy into the discussions.

While we recognize the need to maintain a degree of confidentiality in negotiating our trade agreements, we remain disappointed that important stakeholders including civil society groups, businesses, and academics have not been able to meaningfully participate in the treaty process. The Industry Trade Advisory Committee on Intellectual Property (ITAC-15) has a limited membership, precluding a more diverse set of stakeholders from being able to review and provide input on the negotiating texts or regularly meet with United States Trade Representative (USTR) negotiators.

In particular, we are concerned that the TPP Intellectual Property Rights chapter leaked in November 2013 would place undue restrictions on our copyright laws, harming our innovation, our economy, and an open and free Internet. These standards are troubling given their ability to potentially restrict the legislative branch, particularly when Congress has indicated it is beginning to evaluate the merits of revising these laws. For example, as sponsors of H.R. 1892, the Unlocking Technology Act, we are particularly troubled by draft proposals concerning prohibitions on the circumvention of technical protection measures or Digital Rights Management. The leaked treaty draft includes language that would seemingly make any permanent fix to unlocking cellphones illegal. Intellectual property is a dynamic policy area in which preserving Congress’ ability to adapt to the changing nature of technology is absolutely critical for the United States and our trading partners.

To that end, we encourage the Administration to work with the negotiating parties to publicly release the current official text of the TPP intellectual property and related chapters—or at least summaries of these proposals—and invite public comments on such provisions before the agreement is concluded. A strong precedent already exists for such a process; for instance, the Anti-Counterfeiting Trade Agreement official text was made public an entire year before the agreement was finalized. Additionally, in the future we urge you to develop a more open model of trade agreement negotiation.

Personally, I think this language could and should be much, much stronger, given just how out of touch with reality the USTR seems to be. With the Congressional Research Service itself noting how much more important digital services exports are to the economy, why is the USTR still ignoring them, and looking at them as if the internet is a second- or third-class citizen in the US economy?

The Digital Trade Act of 2013 would establish negotiating principles to address several key digital trade matters in future bilateral and multilateral agreements and in multistakeholder settings. Those principles include: preventing or eliminating restrictions on cross-border data flows, prohibiting localization requirements for data and computing infrastructure, ensuring that provisions affecting platform Internet sites are consistent with U.S. law, and recommitting the United States to the multistakeholder model of Internet governance. The bill requires the president to prioritize digital trade and ensure it benefits from robust and enforceable rules.

Again, it might be nice if this was even stronger, but recognizing that it's difficult to get anything through Congress these days, perhaps you need to start with things that seem simple and obvious, like having the USTR recognize that "digital" is actually a big business these days.

Reader Comments

Google should be pissed...

So how can Google ignore the giant elephant that the TPP is a direct attack onthen where Microsoft controls the market digitally while they have to expend massive resources to fought this and the government on the NSA front?

Did they just not think that maybe the TPP wasn't a threat to them? While I could think of other companies, the Google v Microsoft debate heating up on the copyright/patent front should have been a reason they focus more on the public rights issue which helps them out considerably.

I'm willing to bet that the MPAA/RIAA products count in that $356 billion line. The danger is using information like this is that it cuts both ways, they will say that because the digital economy is such a large part of trade it must be protected at all costs.

This means, then, that your stand against "intellectual property" is wrong!

It's big biz, indeed, one of the few areas the former US of A is still tops: making big-budget popular crap with 'splosions, shoot-outs, and car chases.

So... Does Mike "support copyright" and want it preserved? ... We don't know! I've been trying to guess for three years! So skip that.

Now, is Mike actually for TPP? -- Well, evidence here is that he's NOT opposed to TPP as such, just wants this and that included or excluded! -- SO, apparently Mike is FOR the sovereignty-destroying pro-corporate, extra-legal trade deal, so long as it's tuned right...The Trans-Pacific Partnership treaty is the complete opposite of 'free trade'The TPP would strip our constitutional rights, while offering no gains for the majority of Americans. It's a win for corporations

perhaps the first questions to ask are who decides that USTR is going to be the 'gang' who are to represent the USA in 'Trade Deals'? who decides who is going to be in that gang? who decides what is to be included in these deals and who decides which other countries are to be targeted?someone, somewhere, with an awful lot of power to wield makes the decisions to do with these negotiations. make that person known to everyone, so that when theses deals fail, the blame gets laid where it should do. after all, not every country is going to be stupid enough to sign away all assets it has or screws all it's people just because the USA tells them to do so!

Re: Re: $365 bn???

Re: Re: Re: $365 bn???

Between my Xbox Live Gold subscription, PS Plus account, Spotify subscription, various purchases from GoG, Humble Bundle, Steam and other gaming services, the occasional paid iPhone/OSX app, music or Kindle purchase, I probably spend more than enough the make up the difference between us there. That's not even mentioning the products I pay for that don't "count" as exports such as my Netflix account (for which I need to use a VPN service). I also pay for non-entertainment products (domain names, my hosting provider, OS purchases) and things that may not even count as purchases at all (do Kickstarter contributions count in those figures?).

I would also presume that corporate purchases are counted, in which case each year I'm in charge of a minimum of tens of thousands of dollars in licence subscriptions, etc. from US companies that would be counted in these figures.

So, yeah, $60 per person on the planet isn't that great a stretch considering that a great many of the people who pay for content are paying much more than that, often in a single transaction (especially where corporate software is concerned).

"Digitally enabled services" is pretty sketchy

I looked at the summary report. Once you get past the typos (they say "millions of dollars" when they mean "thousand of dollars" -- we're not talking about three hundred trillion) it shows that there are a lot of guesses and exclusions.

One big point is that that report talks about exports (and imports) and ignores internal issues. But the TPP would affect internal business too, which makes the number presumably a LOT larger.

The important part is that ⅓ of the number ($105 Bn) is royalties and licenses which include TV/Film/Music as blaktron theorized, but also software and patents. Looking at who gets access to TPP negotiations, it does look like the tail is wagging the dog: the "stakeholders" who get to participate in the negotiations represent perhaps 10% of the money under discussion.

Re: "Digitally enabled services" is pretty sketchy

Indeed. This seems like a walking-on-eggshells method of improving the TPP. It could easily result in just a *different* group of wrong people making the decisions.

Sidenote: the report is correct, it's "millions of dollars". 1,000 million is a billion, which reflects the numbers you would expect to see. So "Digitally enabled services" - listed as 356,000 - would be 356 billion, for example. If it was thousands, then we'd only be talking about a few million here and there, which'd be peanuts.

Appealing to the Administration I am afraid won't help in this matter. The USTR is part of the executive branch and as such, is operating under the guidance (even if indirectly of Obama. So take it as having his approval. The only time Obama goes changing things after the fact is when there is a public tide of opinion against him. Even that hasn't fazed the White House when it comes to Snowden.

Threaten the party with voting them out of power and you get a better response. Notice that they are trying to conclude this before the election season madness starts.

Re:

Don't get me started on the madness. We're stuck between "bad" and "worse" because we've allowed ourselves to be split along partisan lines, so good candidates are being overlooked because they're either on the wrong team or not ideologically pure (what the rest of us call "extreme") enough.

Let's get away from that and start working together to choose candidates who will represent the people properly instead of sticking to party lines.

Protection?

I seriously think people need to recognize what happens if you "protect" an industry. This is clear proof that the protection doesn't help at all.

I believe the bovine and textiles industry were a part of NAFTA. If anyone paid attention to the trade agreements there, they basically shipped jobs overseas along with those of the manufacturing industry in order for the "protected" industries to become prosperous by making workers miserable.

So it seems that these trade agreements protect corporations over the needs of the public. If the TPP were to be signed tomorrow, it would harm America far more than it help and you can tell that by comparing the numbers of those industries affected by NAFTA.

Wyden/Thune Digital Trade Act not a boon to mankind?

Some of the Digital Trade Act provisions, as described, seem plusungood.

"Preventing or eliminating restrictions on cross-border data flows": Sounds like this is intended to wipe out some very significant EU privacy protections and keep other countries from enacting such protections. The EU cross-border data flow rules say that personal data mustn't be exported to countries that lack effective laws to protect the data against disclosure or misuse. For example, these rules brought about a reduction in the airline passenger manifest data which European airlines transfer to the US government.

"Prohibiting localization requirements for data and computing infrastructure": This would do away with such things as the rule that products sold in France must have instructions written in French, user interfaces with French labels, be capable of displaying French text with proper accents and the like. Such rules are wholly reasonable and should not be prohibited, even though they can inconvenience vendors who might prefer to supply Chinese instructions only, for example.

"Ensuring that provisions affecting platform Internet sites are consistent with U.S. law": What does this even mean? It sounds deliberately vague. Does the US government want to force foreign Internet providers to conform to US laws for such things as copyright takedowns and CALEA VOIP interception?

Before supporting the Wyden/Thune Digital Trade Act, there should be a clearer understanding of what it would actually do.

Re: Wyden/Thune Digital Trade Act not a boon to mankind?

^ This.

Exactly what jumped into my mind when I read the article.

I for one would not like any of my personal data leaving the EU, where (at least to some degree) it is protected by EU "data protection" privacy legislation, and where (at least in theory) if those protections turn out to be insufficient EU legislators have the capability to review that legislation and make it stronger.

"Ensuring that provisions affecting platform Internet sites are consistent with U.S. law" -- while there may well be a minimum set of obligations and minimum set of freedoms that might be identified for platform sites, that's different to trying to slave other countries to follow U.S. law (and lock U.S. law into some treaty-set stone).